Caroline Cai, the CEO of U. S. -based Pzena Investment Management, believes that now is the time to increase exposure to Chinese stocks. She argues that the risks are obvious to everyone, but the valuations are so low that investors are being compensated for taking on that risk. This perspective is a shift from the firm's usual cautious stance on China's long-term economic outlook.

The investment firm has been ramping up its holdings in Chinese equities over the past two years. Cai is drawn to the extreme undervaluation of Chinese stocks, where investors seem to have lost all interest. "The idea is that if the risk is clear, at least you're getting a good deal for taking it, " she explained.

Not everyone shares this optimistic view. Adam Coons of Winthrop Capital Management is taking a more cautious approach, choosing to wait a bit longer before re-entering the Chinese market due to concerns about potential short-term reversals in the stock market.

China has been taking steps to revive its economic growth, including measures announced by the People's Bank of China in September to reduce the cash reserves that banks must hold.

Investing in Chinese Stocks: Worth the Gamble?

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